China CPI and PPI drops; Global equity markets rallied; USD slightly higher against G10 counterparts; CHF was the weakest among G10, down more than 1.00%; Gold and Silver traced out a near-term top; Brent oil price rallied more than 23.0% from recent lows; Selling grew thicker on Bitcoin and Ripple beat down 10.00% each; Powell repeat the patient formula; Market wrap.

China official CPI readings fell in December, according to the government data.

• China’s December CPI was 1.9% YoY, the lowest in six months, forecast 2.1% vs. 2.2%.
• December PPI was 0.9% YoY, the lowest since September 2016, forecast 1.6%, vs. 2.7%

  • Global equity markets painted green overnight, this morning Asia set to open higher. 

AUS200, US30,US500, and USTEC (KTM symbols) are rallied for the fifth-straight session, but despite recent strength could of indices capped at key resistance levels.

Here are our insights:
ASX (KTM: AUS200): Marching towards 100MA, trading at a month high

FTSE100 (KTM: UK100)- settled >50MA for the first time since August 2018.

Nikkei (KTM: JP225): tad above 20MA, BUY above 20480 targets 20750 and 20930.

NAS100 (KTM: USTEC): Facing res against 50MA.

S&P (KTM:US500) Post first 5-day run, aiming at 50MA.

FTSE MIB (KTM: ITA40): Settle above 50MA for the first since Sep 2018, aiming at 100MAs@10600.

CNBC reported “ The power of the recovery rally in the US and global equities has been impressive,” Michael Shaoul, chairman and CEO of Marketfield Asset Management, wrote in a note to clients.

  • The dollar index manages to hold the 200MA overnight and closed above 200EA aswell, climbed 0.40%. The dollar dominion widespread against the G10 counterparts, especially against THE Swiss Franc down more than a percent. Readers can remind our long forecasts NZD and EUR against CHF. NZDCHF run through the first target, we set Thursday.
  • Besides, GBP again rejected against the descending trendline which coincides with the parallel resistance seems at 1.2815. So far, twice this week we recommended sell against 1.2815 and the price retraced as forecasted. We expect a big squeeze above 1.2815 until range trading remains.
  • Turning to precious metals, Gold and Silver traced out a near-term top via double top pattern formation at 1298.50$ and 15.80-15.90$ respectively. Ahead of today’s U.S CPI data, we are going to trade in a tight range 1276-1298$ and 15.40-15.90$ respectively. Moreover, the daily indicators are remaining bearish.

  • Brent oil is holding its gains, rallied more than 23.00% from recent lows, but still in the given resistance zone. The daily indicators are remaining bullish; dip buying offers better risk reward. Bloomberg reported, “Oil extended its winning streak to the longest in almost a decade.”
  • In cryptocurrencies, the selling grew thicker and stronger with Bitcoin and Ripple down 10.00% each. At the time of writing, Bitcoin is trading at 3600$, but interestingly it has managed to hold the parallel support zone 3500-3475$, so far.

Day Ahead:
We see Aussie November Retail sales in Asia, Italy IP and UK November GDP in Europe session. Finally U.S CPI for December due at 13.30GMT. Due to a recent sharp oil price correction, we expect CPI to fall 0.1%.

It is important to always keep in mind the risks involved in trading with leveraged instruments.

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